Daily (12.08.2019): European spot power prices plummeted by nearly 70% on Friday due to a surge in renewables output

12/08/2019 11:16 Daily

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Oil prices continued to climb on Friday, in response to weaker Euroilstock data, which showed a decrease in the total crude and product inventories of 16 European countries in July. Prices also drew support from OPEC supply cuts and Saudi Arabia’s commitment to bring the oil market back to balance. Hence, Brent crude rose by 2% to $58.53 a barrel. Concurrently, WTI futures surged by 3.7% to $54.50 a barrel, on lower production growth forecasts after U.S. drillers slashed the active oil rig count for a sixth straight week.

British wholesale gas prices varied on Friday. An expected decline in wind generation in the coming week boosted demand from gas-fired plants, sending NBP spot higher at 4.7% to 29.20 p/therm. In the meantime, the contract price for delivery in Q1 2020 decreased by 0.7% to 54.43 p/therm, after an outage ended at Norway’s Troll field, while more other maintenance works are expected this month.

 

Friday saw a sharp fall in the European prompt power prices, which settled in the negative territory for six hours due to a surge in renewables output, before heading for recovery. The price for the German spot power contract plummeted by 67.9% to 12.44 EUR/MWh, while the price for the equivalent French contract slumped by 51.7% to 14.03 EUR/MWh.

 

Forward electricity prices were bearish, influenced by lower carbon prices and weaker fuel contracts. The German power contract for delivery in 2020 traded 0.2% down at 50.24 EUR/MWh, while the price for the equivalent French contract was almost unchanged at 52.42 EUR/MWh.

 

EU carbon prices pared gains on Friday, following bearish coal prices and the downward trend in several gas contracts. A pessimistic prospect of macroeconomic data also weighed on market sentiment. Consequently, the price for the contract expiring in 2021 fell by 1.4% to 28.87 EUR/MWh.

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